UPDATE: Christopher & Banks Posts Downbeat Q3 Sales, Issues Weak Sales Forecast

Shares of Christopher & Banks

slipped more than 7% in pre-market trading after the company reported weaker-than-expected sales for the third quarter and issued a downbeat forecast for the fourth quarter. However, the company posted upbeat quarterly earnings. The Plymouth, Minnesota-based company reported quarterly earnings of $9 million, or $0.24 per share, compared to $8.6 million, or $0.23 per share, in the year-ago period. Its net sales slipped to $110.6 million from $118.1 million. However, analysts were expecting earnings of $0.21 per share on revenue of 115.71 million. Its same-store sales dropped 7.6% in the quarter, versus a 4.9% rise in the year-ago quarter. Gross margin widened 140 basis points to 39.5%, while operating income rose to $9.3 million or 8.4% of net sales, from $8.6 million or 7.3% of net sales. As of November 1, 2014, cash, cash-equivalents and investments totaled $43.7 million. LuAnn Via, President and Chief Executive Officer, said, “Despite the continued softening of retail traffic patterns since our last update, we were able to deliver a year-over-year improvement in gross margin rate for the third quarter. As we carefully monitor and respond to current business trends, we will remain focused on the numerous growth avenues ahead of us. We see opportunity to further evolve our merchandise mix with more fashion and newness, and to more closely align our offering with customer preferences on an individual store level.” For the current quarter, Christopher & Banks projects revenue of $94 million to $98 million, versus analysts' estimates of $108.0 million. Christopher & Banks shares fell 7.57% to $6.35 in pre-market trading.